Possible Strategic Choices for Samsung Galaxy S4 - Case Study Example

Executive Summary The Samsung Galaxy S4 is a Smartphone manufactured by the Samsung Company. The company’s product has attracted many customers in the market enabling the company to realize a large sales volume within a short period. The smart phone from Samsung Company is currently dominating the entire android market globally. This paper will focus on various strаtеgiс сhоiсеs for the Samsung Galaxy S4. This is vital for maintaining соmреtitivе аdvаntаgе in shаkеоut, mature and dесlining markets. It is essential to analyze these strategies because the company requires them to survive the galaxy through its life cycle, and also through the stiff competition in the market. Tables of Contents Executive Summary 1 Introduction 3 Main Body 4 Product life cycle 4 New Market Entry 4 Growth Stage 5 Market follower 5 Strаtеgiс сhоiсеs for maintaining соmреtitivе аdvаntаgе in: 6 1.Shаkеоut Stage 6 Competitive advantage 6 2.Transition Phase 7 Objectives of the Transitional Phase 8 Market Share 8 Decide if Gaining Market Share is Desirable 8 Understand Competitive Advantage 9 Determine order winners 9 Spend on Promotion 10 Improve Service 10 Mature stage 11 Declining stage 11 New Economy Markets 13 1.Benefits of the New Economy Markets 14 Organization structure 14 Succession 15 Decision making 15 Marketing plan 16 Marketing Metrics 17 Marketing audit 17 Benefits of Marketing Audit to the Samsung Company 18 Conclusion 18 References 19 Introduction Business faces various challenges trying to maintain соmреtitivе аdvаntаgе in various stages of a product when going through their life cycle. Any product must go through various stages starting from introduction to declining stages. To understand this concept, this paper will analyze the Lifecycle of a Samsung Galaxy S4 on the market. It will explain factors that need to be done in order to maintain the product’s competitiveness in the shakeout, mature and declining market. Main Body Product life cycle The Samsung Galaxy S4 is currently in the maturity stage of its Lifecycle. The product is in high demand though there is a risk of competition from the new smart phones that was introduced recently. The manager of Samsung Company has recently announced the highest profit is this product line. It is essential for the entire management to use the following strategies to ensure that the Samsung galaxy remains on the market despite high competition. New Market Entry 1. Follower The Samsung Galaxy S4 is a follower. The company, therefore, has strategies well so that they can produce quality galaxy that can satisfy the customers’ needs. Apple Company was the first company to launch smart phones in the market becoming a market leader. There are also various strategies used by the Samsung Company when attacking the competitors in the market. These strategies comprise of offering lower prices for the products in the market, improving services and offering discounts. The Samsung Galaxy S4 is a smart phone with unique features (Bastien and Kapferer, 2013). According to Theodore Levitt in his article named innovative imitation, he believes that imitating a follower is much profitable as a product innovation strategy. Other researchers believe that the strategies that work best for the followers are as follows a. Counterfeiter- this is considered illegal b. Cloner c. Imitator e.g. Samsung smart phones imitate the style of apple phones d. Adaptors Samsung Company uses all these strategies to ensure that they gain competitive advantage in the market and at the same time they struggle to win customer loyalty. The key strategy they use is to satisfy customers. It is essential to live customers when they are satisfied so that they can offer a word of mouth to other potential customers. As a follower, the company has an advantage of improving its product features by copying what the market leader has done. Growth Stage The life cycle of the Samsung Galaxy S4 is shown in the diagram below. Various products pass through these stages though it is possible to maintain a product in the maturity stage provided the company are using the relevant strategies. Market follower At growth stage, the company enjoys various factors such as high sales coming from sales of galaxy S4. The demand for the galaxy at this stage is high making the company record high sales. Galaxy S4 is able to attract many customers because it is a follower, therefore; the company can learn from leaders and make the necessary improvement on the galaxy. In additions, the galaxy S4 will be technologically advanced because they company will be manufacturing knowing that there are market leaders’ smart phones in the market. They can analyze competitors to ensure that they incorporate all features before launching the product. It is beneficial to be a follower because the company will be targeting matures customers in the marketing who are thirsting for new things. Smart phones are technological equipments and customers are looking for the one which more advance (Cusumano, 2013). Strаtеgiс сhоiсеs for maintaining соmреtitivе аdvаntаgе in: 1. Shаkеоut Stage Competitive advantage At this stage, the company can maintain a competitive advantage by offering fair prices for the galaxy. Furthermore, the company must ensure that the galaxy S4 has various features as compared with other smart phones from other companies such as nexus or apple. This will help the company to compete effectively in the market. According to Gong (2013), Galaxy S4 is a follower because nexus and the apple company were the first to launch their product. However, Galaxy can overcome them by marketing the product intensely and increasing the resource commitment. Such strategies will enable the company to make up the lost time and other possible foregone advantages and catch up with others in the market. Management scientist; Frederick Taylor believes that followers have an opportunity of investing in the markets that are already tested. He further argues that pioneers tend to overlook the risks, challenges and the constraints that result in operating in the new volatile market conditions. This can be costly to the company and can lead to huge losses for the company. Followers, in most cases, are not prone to such problems. It is essential to note the fact that Samsung galaxy S4 can augment performance by adopting effective strategies such as price penetration, price skimming and offering of sales discounts. 2. Transition Phase This is another essential stage in the life of a galaxy S4 in the market. It involved testing the product and collecting the feedback of the customers concerning that product. This phase is commonly used when the company wants to introduce the product into the new market. In this phase, the user feedback will only be used to modify the product until it meets the expectation of the customers. By the end of the transitional phase, the life cycle objective should have been met by the galaxy. However, there are situated when the end of the current Lifecycle of the galaxy can coincide with the start of another life cycle of the same galaxy. This is essential because, in such a situation, it will take galaxy to the next level of generation without the galaxy being obsolete or being overtaken by other new smart phones. This is a competitive strategy of maintaining a galaxy in the check out stage without the worry of being obsolete. According to Keeble (2013), he believes that the transitional phase for the galaxy S4 or any other product can be straightforward or extremely complex depending on the marketing strategy for the galaxy. Marketers need to carry out market research so that they can identify what the competitors are doing in the market. It is essential to benchmark the galaxy S4 with nexus or google smart phones. Technology is spreading fast, and marketers need to be so fast in adopting and installing new features in the galaxy for the smart phone to remain relevant. Objectives of the Transitional Phase 1. To train the users and maintainers of Samsung Galaxy S4 2. Testing and validating the effectiveness of the galaxy in the market 3. Achieving user self-supportability of galaxy S4 4. Assessing the customers' feelings concerning the galaxy S4 Market Share This is the percentage sales that Samsung Galaxy S4 can gain in certain market. The percentages depend on the stage of the life cycle of a galaxy in the market and also the strategies used by the company. For instance, the Samsung Galaxy smart phones have about 75% of the annual unit sales of phones in Australia. It is obvious that when the company realize a higher market share, it will translate into higher profit within that trading period. According to Frederick Taylor, companies build market share as a strategy to improve the company’s standing in the market (Garvin at al, 2013). Decide if Gaining Market Share is Desirable Samsung Company needs to consider various issues because it is expensive and risky gaining a large market. Some of the issues that need to be considered are as follows; 1. In places with high growth markets, it is easier for the Samsung Company to build market share without triggering a price war. In such markets, it is possible to share the pie chart with competitors without incurring expenses such as lowering the prices. 2. To gain a market share despite the competition, it is necessary or company to deliver quality galaxy that can last for long. 3. Samsung Company can consider acquiring small companies so that they can expand their market share. 4. If the Samsung company realized that its competitors such as nexus and apple are not able to cut prices because of the financial distress, it is advisable for the Samsung to pose. Understand Competitive Advantage Samsung Company will be able to control large market share by understanding the application procedures for the available different competitive advantages. There are various types of competitive advantages and their effectiveness depends on the status and the nature of the market. These types include quality, low cost, speed & reliability and customized products Determine order winners These are qualities that customers are looking at galaxy phones and are not found in other Smartphones from other companies. Customers will prefer galaxy because of features that might not be found in other Smartphones from other companies. Order winners are the соmреtitivе аdvаntаgе in shаkеоut stage that need to be maintained by the Samsung Company. It helps the company to gain and maintain competitive advantage regardless of being a follower. Hence, to gain market share it is essential for the Samsung Company to adopt strategies and understand the winning criteria on the market segment they target. They can do this by ensuring that the galaxy S4 offers quality services that leave the customers satisfied than before. Samsung Company needs to carry out market research so that they can understand the needs of customers, the strategies used by the competitors and to analyze their industry for improvement purposes. In any given, order winners are one or more of the type of competitive advantage. These elements are not static, they change frequently and it is an obligation for the Samsung Company to follow it and monitored these winners sort by the customers (Hart-Davis, 2012).  Spend on Promotion Samsung Company needs to spend on promotion so that they gain a better market share. Promotion is the best strategy of improving the image of the product in the market. Furthermore, promotion is a strategy that can be used to focus on the market with underspent or neglected by the competitors. Promotion is, therefore, one of the competitive strategy for the Samsung Company in maintaining customers’ loyalty and the market share in the shake-out stage. This stage is crucial and it requires effective strategies so that the product can be maintained in the market for much longer time. Improve Service This is another strategy that has been overlooked by marketers. It is essential to offer services such as after sale service and the purchasing experiences. This will make the customers feel valued and part of the company. This is a very strong marketing strategy that can increase competitiveness in the shake-out stage. Samsung should train its employees on how to pack products in a professional manner. Some customers want to be notified that they shop from Samsung Company and this can be done by the packaging Samsung galaxy in a well printed polyethylene bag Mature stage This is a stage whereby the sales peaks then slow down because of high competition. Samsung galaxy is currently at this stage. There are possibilities that the Samsung galaxy has slowed down because the smart phone has reached widespread acceptance, and competition is fierce. Some serious competitors in this market comprised of the Nexus smart phones and the Apple smart phones. According to Johnston (2013), he argues that the galaxy S4 will tend to spend longer time in maturity stage because it survives the earlier stages of its life cycle. However, the experience at this phase is not always favorable for the company because the strong growth in galaxy sales diminishes. According to this scientist, the best number one strategy at this point is for the Samsung Company to defend the market of the galaxy and fight to maximize profit. There are various strategy choices that can be used in this phase to maintain the competitive advantage of galaxy S4. Some of the effective strategies include: 1. Promotions that differentiate galaxy S4 from other Smart phones 2. Pricing the galaxy S4 at lower prices than the competitors 3. Distribution of Samsung galaxy S4 to more intensive 4. Offering incentives to customers who are purchasing galaxy phones 5. Enhancing galaxy features to differentiate it from other Smartphones. Declining stage This is the final stage in the life cycle of Samsung galaxy. Some of the factors that are expected to push galaxy S4 to this stage include changes in customers’ taste and preferences, changes in technological advances, changes in fashion and even innovations. This is the crucial stage that requires a lot of attention from the entire company. The following are the characteristics of the products that are in the declining stages. It includes the reduction in the revenue generated, changes in the net profit and also changes in demand (Patel, 2013). However, there are some of the strategic choices that need to be implemented so that the Samsung Company can maintain the competitive advantage of its galaxy in the market. These strategies comprised of the following: 1. Samsung company can decide to maintain their product because it is obvious that the competitors will withdraw their smart phones as a way of avoiding losses at this stage 2. The company can also adopt the strategy of renaming the galaxy S4 so that customers can feel that the product is a new one 3. The company can also reduce the marketing support that is allocated to that sector ‘harvesting’ the galaxy before renaming it. 4. It is essential to discontinue or rename the galaxy if the profit disappears These strategies are essential because it they can act as an 'extension strategy' to the life cycle of the Galaxy S4. This extension strategy gives the company enough time to re-brand the galaxy to replace it with other models such ass galaxy S3. The diagram below shows the extension strategy that will likely to be adopted by the Samsung Company. New Economy Markets The electronic products are mostly operating in the new economy market because the prices of the products are determined by the market forces of supply and demand. Under the normal circumstances, various changes are expected to take place. Some of the changes are likely to happen because technology is changing and this will affect various products in the market. Galaxy S4 will be out of the market because new smart phone with new features are likely to be launched. Besides, customers are always sensitive they change as technology changes. Everyone would have the latest phone devise making the current galaxy to be obsolete. Technological devices are gradually changing as time goes. When you look back, in 2008 and 2009, there were phones (Motorola) that were dominating the market at that time, but today, you will not see them because of changing technology. Customers in this segment are looking for satisfaction, and their needs can only be satisfied by the technologically advanced phones. 1. Benefits of the New Economy Markets Some of the benefits that are likely to be seen in this kind of market are the improvement in the living standard. The living standard is likely to increase because the competition in the market. Companies will be forced to reduce the price so that they secure their market share. This is an advantage to the customers. Besides, the Samsung will improve the quality of the galaxy as a way of maintaining customers in the most competitive market. Customer service will be enhanced so that the company can benefit from the referrals of mouth of mouth by the satisfied customers. It is essential to make sure that customers are satisfied so that they can develop loyalty towards the product of a company. The management scientist believes that customers are always willing to pay premium prices for quality products. Most of the customers are looking for satisfaction when they are purchasing the products in the market. Organization structure Organizational structure is an essential for every company because it directs the flow of information and how an employ can seek clarification or can air his or her complaints without affect the daily business of the company. According Westwood (2013), Organizational structures are beneficial to the companies because the following: Succession Through organizational structures, the company is able to perform staff development. This is because it is simple to identify employees who are naturally gifted with the leadership skills. The company can arrange and trained them so that they can occupy leadership within the company when the managers retire. Decision making According to Ingram (2013), when a defined hierarchy is in place, it is easier for the company to make decisions because there is support from the entire company. It is essential for every employee to be aware of the plans and the mission of the company so that they can deliver according to their ability. The Samsung Company is able to enjoy such benefits because the company as a well-defined organization structure. Marketers are able to decide because of delegated powers that they enjoy. This helps in improving the competitiveness of the company. Marketing plan The marketing plan of the Samsung Company is efficiently developed by carrying out environmental scan. This can be done through SWOT analysis of the company. It is essential to establish the weaknesses of the company, opportunities, threats and the strengths. In summary, some of the strength of the Samsung Company includes the positive image of the company in the market. This has enabled the company to position itself as efficiently in the market. It is also evident that the smart phones from this company are selling like fire in the market. Many people want to associate themselves with the company’s brand name. The opportunities on the hand include the emergences of new markets for the galaxy in the developing countries. Besides, the company is currently enjoying diseconomies of scales. This has resulted to high profit realized by the company (Samli, 2013).  Weaknesses and threats facing the company is competition. Samsung Company is facing stiff competition in the market. Marketing Metrics The Samsung Company operates under the guidance of SMART objectives. This is a strategy that has enabled the company to maintain competitiveness despite high competition in the market. The SMART is an acronym that stands for Specific, measurable, attainable, and reliable and time bound. These objectives guide the move of the company in designing the smart phones that will target a wide variety of customers in a diverse market. The company relies on these objectives as shown below: 1. Specific- the company is specific in terms of the features they install on their devices. The galaxy S4 is very powerful in terms of internet connectivity, powerful camera and the portability of the device. 2. Measurable – the objectives need to be measurable. For example, the Samsung Company needs to estimate the number of galaxy S4 to be distributed to certain market segments. 3. Achievable – the projected sales need to be achievable. This is essential because it will help the company to decide on the amount spend on promotions. 4. Relevant- Samsung Company needs to train employees so that they can deliver reliable information concerning the usage of the galaxy S4. 5. Time bound- time is the most resourceful asset for Samsung Company. It is vital to act in the right time so that the galaxy S4 can secure a market. Delivering galaxy that meets the current fashions is beneficial because it will attract many users and non-users. Marketing audit This entirely concerned with appraising the current marketing activities of the company. It focuses on various elements that comprise of goals and objectives of marketing the Samsung Galaxy to certain market segments. The process aims at measuring the benefits of focusing on a certain segment (Gupta, 2013). This process is essential because it directs the company into a profitable project and at the same time, it minimizes the wastage of resources that are incurred focusing in unfruitful segments. Benefits of Marketing Audit to the Samsung Company 1. It reintroduces you to your product – this is essential because it reminds the marketers about the product they are marketing. There are marketers who have been seriously embarrassed by the customers. Imagine a situation when you receive a phone call only to be told that you have no idea on what you are marketing! 2. It reminds you of the initial campaign goals - marketing can sometimes be challenging. I have seen marketers who changed on the way and finally get lost without achieving the initial goals or what they end up doing. 3. Help in assessing what works, and what does not work – marketing audit enables a marketer to assess what he has done, what he has achieved and what he fails to achieve. This is essential for future because next you will only involve yourself in things that are working. 4. Finally, aid decision making - it is essential to involve yourself on marketing activities that are worthy of the company. Conclusion In conclusion, it is essential for the Samsung Company adopt competitive strategies so that they can compete effectively offering a Samsung galaxy in the market. Marketers need to equip with marketing skills and customer care skills so that they offer quality services. In this way, the company will acquire a large market share, and at the same time developed customers’ loyalty on their products. References Bastien, V., & Kapferer, J. N. (2013). More on Luxury Anti-Laws of Marketing. In Luxury Marketing (pp. 19-34). Gabler Verlag. Cusumano, M. A. (2013). The Apple-Samsung lawsuits. Communications of the ACM, 56(1) Fred, E. (2013). Samsung Galaxy Tab 2 (10.1)-Understands Your Expectations. Gong, Y. (2013). Competency-Based Fundamentals. In Global Operations Strategy (pp. 101- 140). Springer Berlin Heidelberg. Garvin, K., González, F., Ruegger, R., & Santos, L. (2013). Design of small interfaces. Gupta, J. (2013). Samsung Galaxy S Advance I9070@ Rs. 13,050. Hart-Davis, G. (2012). How to Do Everything Samsung Galaxy Tab. McGraw-Hill/Osborne. Johnston, C. J. (2013). My Samsung Galaxy Note™ II. Que Publishing. Ingram, D. (2013). Samsung Galaxy Note 8.0: Early Review. Keeble, D. (2013). The culture of planned obsolescence in technology companies. Patel, N. (2013). Samsung Galaxy Beam GT-i8530: Review. Samli, A. C. (2013). From a Market Economy to a Finance Economy: The Most Dangerous American Journey. Palgrave Macmillan. Westwood, J. (2013). How to write a marketing plan. Kogan Page Publishers. Read More